The hard spin that investors put on their own charter corporations is that they do education better, and for cheaper than those bad public schools. But, with some years of experience behind us now, it is clear that charters do neither.
Continue reading Charter’s Don’t Do It Better or Cheaper
This is what happens when a state hands over public education to investors and bankers: They use up the school start-up effort for financial reasons only and forget the potential for negative impact on the students if the school fails.
As reported by The Charlotte Observer, the most recent casualty is the StudentFirst charter school in North Carolina that abruptly announced last Friday that it would be closing its doors for good after numerous struggles with unethical administration and misuse of public funds. Here is a reaction from an involved parent that day:
The Republican-dominated North Carolina legislature made this possible by instituting sweeping reforms a few years back that took local control out of the hands of locally elected school boards and handed it over to a statewide appointed commission that was supposed to be a big improvement of accountability for charter schools in the state.
Sound familiar? That’s because Oklahoma is proposing the same model framework in SB 573. I described the details of that bill in my earlier post.
The framework gives all accountability to one appointed state-wide commission that controls which charters are allowed and which are to be disciplined and controlled. Most importantly, this commission’s power is mostly after-the-fact, rather than proactive. When school debt is allowed, then the potential for a huge waste of taxpayer funds that cannot be recovered becomes larger than any negative potential of the current set of controls in traditional education in the states.
Perhaps it’s because it takes a very different person to do well as a banker or hedge fund manager than it does to be a teacher or a principal.
The NC fiasco shows 
the built-in weakness of the model that has been passed around from red state to red state that allows charter schools to go into debt. When a school administration knows that it cannot take up the slack of its administrative failings with going deeper into debt, then they know from the beginning that they better bring their “A game” to work from day one.
What happened?
1. Model legislation was passed.
2. Authorization of charters was given over to a central commission for the whole state. This was supposed to solve a number of problems that other states have seen by giving the authorization job over to special people with special training and talent to do that job of authorization and oversight. It didn’t work that way, just as it hasn’t worked in so many other states.
3. Due to bad administration at the school, financial problems started affecting the performance of the school. This shows that money actually does matter in public education and has a profound impact on the performance of a school.
4. Once word got out of financial difficulties, many parents pulled their students as soon as they could and moved to other schools.
No problem, right? Wrong. What I heard in so many of my struggling students’ stories (and especially when I taught alternative school) was that things started falling apart when they started moving from school to school. Participation in a school has to do with consistency, relationships, and continuity of expectation. Going to school is not like walking into your favorite restaurant or clothing store. School is less a place to be shopped than a relationship to be developed.
And this is the big difference between the way that a corporate raider thinks about school and the way that an experienced teacher or principal thinks about school. Teachers know that school is not a place, it is a relationship.
Conclusion: So, we can’t just do speculative work in one charter and – oh, well – if it doesn’t work we just offer a new “store” for the kids to shift over to. It doesn’t work that way. Schools are not stores and students are not customers. That sounds obvious to educational professionals; but, clearly it is not so obvious to bankers who want to make big bucks in the education business.
SB573 is working its way through the Oklahoma Legislature right now. It will allow charter schools to incur debt, privatize profit, and socialize the risk. The current law does not allow charters to take on debt. Yet, almost the whole of public discussion on this so far is focused on the promises of achievement of the students, ignoring the risk to public education funds if those charters go under and file for bankruptcy. The spin is that only charter schools are capable of offering an alternative to current problems in public education.
The problem with this diversion is that charter school laws as they have been enacted in several states have allowed charters to incur debt, and then close, file for bankruptcy, and leave the taxpayers to clean up the mess.
Yet, allowing charters to take on debt is presented as a deal-breaker if not included in new laws. Why? Hedge fund investors “behind the curtain” are the real driving force behind these laws that have been fashioned by The National Alliance for Public Charter Schools for regurgitation in various state legislatures under Republican control such as Oklahoma.
Why hedge funds? Why would they possibly have such a large investment in charters? They see private charters and the service corporations that sign contracts with them as a new and large investment opportunity with the potential for “growth”. That’s investor speak for making a lot of money.
Schools generally go into debt by issuing bonds, which are a way to borrow money from investors. This bill seeks is to allow charters “bonding authority”, meaning that they can issue bonds, or in layman’s language, borrow money.
Now this is where the hedge funds come in. They stand to make money from completing the circle both ways: They make money by investing in the educational service companies that this bill would allow to actually run the schools, and they make money by loaning money to these charters when they are allowed to borrow.
The largest issue with taking a business competition approach to publicly-funded education is that in the business world companies and corporations fail every day. While certain employees and investors feel the emotional sting of a failure, most know that it’s the way of that world.
But, when it comes to schools, no matter how much re-education promoters have tried, when any school fails, it is crushing to students, parents, teachers, and staff. Why? School, no matter how configured, feels like and is treated like a public good by the constituents, almost like the local fire station. It isn’t an auto body or dress shop in a mall. That’s why giving the reigns to people who have no history in education like hedge fund operators, holds so much potential for deep harm.
The proposed law is SB573 sponsored by Sen. Clark Jolley, Republican from Edmond. The House sponsor is Rep. Jason Nelson, Republican from Oklahoma City-War Acres. It is based upon, and nearly identical to a model law produced by The National Alliance for Public Charter Schools. You may download a PDF file of their model here and compare it to the proposed legislation in The Oklahoma Legislature here.
The Oklahoman openly promoted the spin of charter success, and covered a carefully staged event on April 9th at KIPP charter school in Oklahoma City. According to some sources, KIPP in OkC receives somewhere around $7,000 more per student than traditional public schools. Okla. Gov. Mary Fallin and former Fla. Gov. Jeb Bush were the center of attention at this event where no questions were allowed from the news media or from students. Photos in the article were all flattering and promotional. Most interesting were comments at the end of the piece at the bottom of page 2.
The Oklahoma Gazette ran a story that passed through policy talking points from a executive with The National Alliance for Charter Schools, leaving out any mention of counter arguments, and made it more of a human-interest story that focused upon one of the current charter school superintendents in Oklahoma City.
The only exception to this type of coverage has been in The Red Dirt Report, a digital news site, where one of the opponents from the legislature points out the threat to public education as too much competition for funds.
The Tulsa World simply passed on the puff piece from The Oklahoman but has reported little on this bill.
It is amazing how little effort has been exerted by news organizations to simply look up news reports of financially failed charter schools. One single Google search, “charter school goes bankrupt” produced these results:
From the Columbus Dispatch in Ohio, we learn of a careful scheme of circular finance that left the public holding the bag: “Taxpayers’ $1.2 million propped up owner’s 2nd charter-school bust”
From the Charlotte Observer in North Carolina we learn about a large charter school effort that has involved unaccounted funds and general turmoil from mismanagement: “StudentFirst charter school dreams fade in startup turmoil”
And then these sites emerged from that single search; but, are more focused on openly opposing charters. Nevertheless, the information is important.
There is the Charter School Scandals Blog that is a listing of charter school scandals that have taken place in recent years.
The Mommy on the Floor Blog raises serious issues about how the effort to fund charters ends up depriving the whole of public education of needed funds.
This piece in the site The Hechinger Report, goes in depth about the fallout from the failure of charter schools.
What happens next in Oklahoma when it comes to charters will have a deep impact on public education in Oklahoma. Let’s hope that it doesn’t have a negative one. Make sure that you are heard on this matter by contacting your legislators now.
Your voice can be heard by looking up your state senator and representative at the state web site, OkLegislature.gov.